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Query: Issue of Bonus share

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)

24 September 2009

In a public company’s shareholding pattern there are 10 shareholders. Is it possible to issue bonus shares to only 4 members with the consent of all members through a general meeting?

Or is it necessary to issue bonus shares to all 10 shareholders?

Company is authorised by its articles to issue bonus shares.

This is one of my friend’s query and he is not satisfied with my answer. I urge you all to provide some solution.

Thanks & Regards

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13 Replies

(Guest)

Company can not do like that. Comany has to issue the Bonus shares to all the shareholders.

Because In eyes of the law, Every shareholder is equal.

However. It is possible that other 6 Shareholder gave away their right to bonus shares.

As happened in the Reliance Power recently.

1 Like

(Guest)

In your case, You can do the following.

(1) Pass resolution giving the bonus shares to all.

(2) At the time of Exercising the Bonus Issue option, the other 6 Shareholder will not exercise the option (It is one kind of consent)

(3) Remaining 4 shareholder will exercise the option.

So, Your problem will be solved & Your freind will also be satisfied.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 25 September 2009

Thanks for your kind help. Now i can easily convince my friend with the help of reliance power example. As i fail to convince him by legal or logical arguments.

But what do you think procedure mentioned in your II reply s enough as far as ROC is concerned.

Regards

(Guest)

Yes, Procedure mentioned in 2nd reply is enough as far as ROC is concerned.

Because Reliance have already done It.

And The act says the Issue of Bonus Shares to the shareholders. Act has nowhere mentioned that the Person has to take the bonus shares compulsorily. It is person's own choice, whether to take the bonus shares or not.

Some person doesn't want to take the shares because of the Income Tax Management or They want to help the company indirectly.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 26 September 2009

Okay. Thanks you very much.

Ekta (Practicing CS) (423 Points)
Replied 28 September 2009

Very Interesting Topic sir...

SIr, I hev one doubt, should we take No Objection Letter from the share holders who waive their bonus shares or not taking the bonus shares, to avoid future consequences???

(Guest)

Yes, You can take NOC from the other shareholders & will keep it in the company for future reference/consequence purpose and/or can file the same to any authority.

CA. Shwetank Vats (Chartered Accountant) (653 Points)
Replied 09 October 2009

Ankur sir,

Very logically clear this point by you.

Can U provide me the current procedure of Demate of Share Certificate which are physically in our hand

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 09 October 2009

Procedure for Dematerialization

To dematerialize any physical security:

a) open a demat account with a DP.

b) fill in a DRF (Demat Request Form) and submit the same with the physical certificate/s to the DP for dematerialization.

c) DP defaces and sends the certificates to the Issuer/Registrar who credits an equivalent number of securities in the demat account, maintained by CDSL.

d) For each ISIN, a separate DRF has to be used.

(Guest)

Agree with the Above answer.

----------------

Advise: While applying the Demat Request, first of all check the signatures. If there is any defect then attch the affidavit because most of the Registrars rejcets the form If there is difference in signature.

sreedevi (Trainee) (118 Points)
Replied 10 October 2009

Dear Experts,

In my company, they issued shares at a premium on 20.8.09 to new groups. Now, the management wants to issue bonus shares against share premium A/c on 20.8.09 to promoter shareholders only not to all shareholders i.e including new group.

The mgt. stated that based on the company's performance only, they accepted the shares at premium? The entire premium amount is belonging to us only, this is our goodwill. We cannot distribute the premium amount to all shareholders.

Pls clarify?

Sree